The Japanese stock market is on fire. That market, as measured by the Nikkei 225 index (the equivalent of the S&P 500), is far outperforming the U.S. market this year. The Nikkei 225 has soared 35% in 2026 and almost 15% over the past month. For comparison, the S&P 500 is up about 11% year to date and 4.8% over the past month.
As in the U.S. market, tech stocks — particularly those related to the artificial intelligence (AI) infrastructure build-out — are driving the market’s rally. Two of the hottest Japanese stocks are Taiyo Yuden (OTC: TYOYY) and Murata Manufacturing (OTC: MRAAY).
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Headquartered in Tokyo, Taiyo Yuden manufactures electronic components, including ceramic and aluminum capacitors, inductors, circuit modules, noise suppression components, chip antennas, and related products.
The company’s multi-layer ceramic capacitors (MLCCs) regulate power flow in electronic devices and are a critical component in AI data centers. A single Nvidia circuit board can require more than 6,000 MLCCs, and there is currently a global shortage of them.
Demand for the components is far outpacing supply
Goldman Sachs expects MLCC demand from AI servers to at least quadruple by 2030, while industry capacity is rising by about 10% per year. In a May interview with Bloomberg News, Taiyo Yuden CEO Katsuya Sase called the demand volume for the components “scary.” So it’s no wonder that Taiyo Yuden’s share price is up 163% over the past month.
Also based in Tokyo, Murata Manufacturing makes electronic devices, most of which are ceramic-based. It is the world’s largest manufacturer of MLCCs. The company’s share price has nearly doubled over the past month, up more than 96%.
Other companies that make MLCCs include Korea’s Samsung Electronics, TDK (another Japanese firm), and Yageo of Taiwan.
Both Taiyo Yuden and Murata Manufacturing serve other sectors beyond data centers. Yuden makes components for the communications, consumer electronics, and automotive industries. Murata supplies parts for smartphones, 5G, automotive, and healthcare devices.
But at the moment, it’s the AI build-out that seems to be driving these stocks rapidly higher. The two companies raised prices on AI server components by 15% to 35% so far this year , and the supply-demand mismatch suggests there’s much more pricing power to be had.
